Accounting Information Systems
JU JU
Instructor’sSolutionsManualJU JU
Accounting Information
Systems
15th Edition
Marshall B. Romney
Professor Emeritus, Brigham Young University
Paul John Steinbart
Professor Emeritus, Arizona State University
Scott L. Summers
Brigham Young University
David A. Wood
Brigham Young University
3-1
Copyright (c) 2021 Pearson Education, Inc.
JU JU JU JU JU
, Accounting Information Systems JU JU
This work is protected by United States copyright laws and is provided solely fo
JU JU JU JU JU JU JU JU JU JU JU JU JU
r the use of instructors in teaching their courses and assessing student learnin
JU JU JU JU JU JU JU JU JU JU JU JU
g. Dissemination or sale of any part of this work (including on the World Wide W
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
eb) will destroy the integrity of the work and is not permitted.
JU JU JU JU JU JU JU JU JU JU JU
The work and materials from it should never be made available to stu JU JU JU JU JU JU JU JU JU JU JU JU
dents except by instructors using the accompanying text in their classes.
JU JU JU JU JU JU JU JU JU JU
All recipients of this work are expected to abide by these restrictions JU JU JU JU JU JU JU JU JU JU JU JU
and to honor the intended pedagogical purposes and the needsof other instruct
JU JU JU JU JU JU JU JU JU U
J JU JU
ors who rely on these materials.
JU JU JU JU JU
Copyright © 2021 by Pearson Education, Inc. or its affiliates. All Rights Reserved. Manufacturedin th
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
e United States of America. This publication is protected by copyright, and permission should be obtai
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
ned from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmissi
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
on in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise. For inf
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
ormation regarding permissions, request forms, and the appropriate contacts within the Pearson Educa
JU JU JU JU JU JU JU JU JU JU JU JU
tion Global Rights and Permissions department, please visit www.pearsoned.com/permissions/.
JU JU JU JU JU JU JU JU
PEARSON, ALWAYS LEARNING, and REVEL are exclusive trademarks owned by PearsonEd JU JU JU JU JU JU JU JU JU JU JU
ucation, Inc. or its affiliates in the U.S. and/or other countries. JU JU JU JU JU JU JU JU JU JU
Unless otherwise indicated herein, any third- JU JU JU JU JU
party trademarks, logos, or icons that may appear inthis work are the property of their respective owne
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
rs, and any references to third-
JU JU JU JU JU
party trademarks, logos, icons, or other trade dress are for demonstrative or descriptive purposes only.
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
Such references are not intended to imply any sponsorship, endorsement, authorization, or promotion
JU JU JU JU JU JU JU JU JU JU JU JU J
of Pearson’s products by the owners of such marks, or any relationship between the owner and Pearso
U JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
n Education, Inc., or its affiliates, authors, licensees, or distributors.
JU JU JU JU JU JU JU JU JU
3-2
Copyright (c) 2021 Pearson Education, Inc. JU JU JU JU JU
, Accounting Information Systems JU JU
chapter1 JU
accountinginformationsystems: U
J U
J
Anoverview
U
J JU
SuggestedAnswers to DiscussionQuestions
U
J JU JU JU
1.1 The value of information is the difference between the benefit
JU JU JU JU JU JU JU JU JU
s realized from using that information and the costs of produci
JU JU JU JU JU JU JU JU JU JU
ng it. Would you, or any organization,ever produce informati
JU J U JU JU JU JU U
J JU JU
on if its expected costs exceededits benefits? If so, provide s
JU JU JU JU JU U
J JU JU JU JU JU
ome examples. If not, why?
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Most organizations produce information only if its valueexcee
JU JU JU JU JU JU JU U
J
ds its cost. However, there are two situations where informat
JU JU J U JU JU JU JU JU JU
ion may be produced even if its cost exceeds its value.
JU JU JU JU JU JU JU JU JU JU
a. It is often difficult to estimate accurately the value of i
JU JU JU JU JU JU JU JU JU JU
nformation and the cost of producing it. Therefore, organ JU JU JU JU JU JU JU JU
izations may produce information that they expect will pr JU JU JU JU JU JU JU JU
oduce benefits in excess ofits costs, only to be disappoint JU JU JU JU U
J JU JU JU JU JU
ed after the fact. JU JU JU
b. Production of the information may be mandated by either a g JU JU JU JU JU JU JU JU JU JU
overnment agency or a private organization. Examples inc JU JU JU JU JU JU JU
lude the tax reports required by the IRS and disclosure req
JU JU JU JU JU JU JU JU JU JU
uirements forfinancial reporting. JU U
J JU
1.2 Can the characteristics of useful information listed inTable
JU JU JU JU JU JU JU U
J JU
1-
1 be met simultaneously? Or does achieving onemean sacrificin
JU JU JU JU JU JU JU U
J JU
g another?
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Several of the criteria in Table 1.1 can be met simultaneously.
JU JU JU JU JU JU JU JU JU JU J
UFor example, more timely information is
JU JU JU JU JU
3-3
Copyright (c) 2021 Pearson Education, Inc. JU JU JU JU JU
, Accounting Information Systems JU JU
also likely to be more relevant.
JU JU JU JU JU J U Verifiable informationis lik JU U
J JU
ely to be more accurate.
JU JU JU JU
However,achievingone objective mayrequiresacrificinganoth JU U
J JU JU U
J JU U
J
er. For example, ensuring that information is morecomplete ma
J U JU JU JU JU JU JU U
J JU
y reduce its timeliness. Similarly, increased verifiabilit
JU JU JU J U JU JU
y and accuracy may reduce its timeliness.
JU JU JU JU JU JU
The decision maker must decide which trade-
JU JU JU JU JU JU
offs arewarranted in each situation.
JU U
J JU JU JU
1.3 You and a few of your classmates decided to become entrepreneur
JU JU JU JU JU JU JU JU JU JU
s. You came up with a great idea for a newmobile phone applicat
J U JU JU JU JU JU JU JU JU JU U
J JU JU
ion that you think will make lots of money. Your business plan w
JU JU JU JU JU JU JU JU JU JU JU JU
on second place in a local competition, and you are using the $1
JU JU JU JU JU JU JU JU JU JU JU JU
0,000 prize to support yourselves as you start your company.
JU JU JU JU JU JU JU JU JU
a. Identify the key decisions you need to make to be successful e JU JU JU JU JU JU JU JU JU JU JU
ntrepreneurs, theinformation you need tomake them, and the b JU JU JU JU JU U
J JU JU JU JU
usiness processes you will need to engage in. JU JU JU JU JU JU JU
b. Your company will need to exchange information withvariou
JU JU JU JU JU JU JU U
J
s external parties. Identify the external parties, and sp
JU JU JU JU JU JU JU JU
ecify the information received from and sent to each of the JU JU JU JU JU JU JU JU JU JU
m.
The author turns this question into an in-
JU JU JU JU JU JU JU
class groupactivity. Students are divided up in groups, tol
JU U
J JU JU JU JU JU JU JU
d toclose their books, and given 15 minutes to:
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J JU JU JU JU JU JU JU
a. Think through the business processes, key decisions,and i JU JU JU JU JU JU U
J JU
nformation needs issues in their group. JU JU JU JU JU
b. Identify the external users of information and specify JU JU JU JU JU JU JU JU
the information received from and sent toeach of them.
JU JU JU JU JU JU U
J JU JU
One group is selected to present their answers to the class. The
JU JU JU JU JU JU JU JU JU JU JU JU
other groups are told to challenge the group’s answers, provide
JU JU JU JU JU JU JU JU JU JU
alternative answers, and chip in with additional answers not pr JU JU JU JU JU JU JU JU JU
ovided by the selected group. Since the group that presents is no
JU JU JU JU JU JU JU JU JU JU JU
t selected until after the time has expired, students are motiva
JU JU JU JU JU JU JU JU JU JU
tedto do a good job, as they will be presenting to their peers.
U
J JU JU JU JU JU JU JU JU JU JU JU JU
The value of this activity is not in arriving at a
JU JU JU JU JU JU JU JU JU JU
3-4
Copyright (c) 2021 Pearson Education, Inc. JU JU JU JU JU
JU JU
Instructor’sSolutionsManualJU JU
Accounting Information
Systems
15th Edition
Marshall B. Romney
Professor Emeritus, Brigham Young University
Paul John Steinbart
Professor Emeritus, Arizona State University
Scott L. Summers
Brigham Young University
David A. Wood
Brigham Young University
3-1
Copyright (c) 2021 Pearson Education, Inc.
JU JU JU JU JU
, Accounting Information Systems JU JU
This work is protected by United States copyright laws and is provided solely fo
JU JU JU JU JU JU JU JU JU JU JU JU JU
r the use of instructors in teaching their courses and assessing student learnin
JU JU JU JU JU JU JU JU JU JU JU JU
g. Dissemination or sale of any part of this work (including on the World Wide W
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
eb) will destroy the integrity of the work and is not permitted.
JU JU JU JU JU JU JU JU JU JU JU
The work and materials from it should never be made available to stu JU JU JU JU JU JU JU JU JU JU JU JU
dents except by instructors using the accompanying text in their classes.
JU JU JU JU JU JU JU JU JU JU
All recipients of this work are expected to abide by these restrictions JU JU JU JU JU JU JU JU JU JU JU JU
and to honor the intended pedagogical purposes and the needsof other instruct
JU JU JU JU JU JU JU JU JU U
J JU JU
ors who rely on these materials.
JU JU JU JU JU
Copyright © 2021 by Pearson Education, Inc. or its affiliates. All Rights Reserved. Manufacturedin th
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
e United States of America. This publication is protected by copyright, and permission should be obtai
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
ned from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmissi
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
on in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise. For inf
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
ormation regarding permissions, request forms, and the appropriate contacts within the Pearson Educa
JU JU JU JU JU JU JU JU JU JU JU JU
tion Global Rights and Permissions department, please visit www.pearsoned.com/permissions/.
JU JU JU JU JU JU JU JU
PEARSON, ALWAYS LEARNING, and REVEL are exclusive trademarks owned by PearsonEd JU JU JU JU JU JU JU JU JU JU JU
ucation, Inc. or its affiliates in the U.S. and/or other countries. JU JU JU JU JU JU JU JU JU JU
Unless otherwise indicated herein, any third- JU JU JU JU JU
party trademarks, logos, or icons that may appear inthis work are the property of their respective owne
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
rs, and any references to third-
JU JU JU JU JU
party trademarks, logos, icons, or other trade dress are for demonstrative or descriptive purposes only.
JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
Such references are not intended to imply any sponsorship, endorsement, authorization, or promotion
JU JU JU JU JU JU JU JU JU JU JU JU J
of Pearson’s products by the owners of such marks, or any relationship between the owner and Pearso
U JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU JU
n Education, Inc., or its affiliates, authors, licensees, or distributors.
JU JU JU JU JU JU JU JU JU
3-2
Copyright (c) 2021 Pearson Education, Inc. JU JU JU JU JU
, Accounting Information Systems JU JU
chapter1 JU
accountinginformationsystems: U
J U
J
Anoverview
U
J JU
SuggestedAnswers to DiscussionQuestions
U
J JU JU JU
1.1 The value of information is the difference between the benefit
JU JU JU JU JU JU JU JU JU
s realized from using that information and the costs of produci
JU JU JU JU JU JU JU JU JU JU
ng it. Would you, or any organization,ever produce informati
JU J U JU JU JU JU U
J JU JU
on if its expected costs exceededits benefits? If so, provide s
JU JU JU JU JU U
J JU JU JU JU JU
ome examples. If not, why?
JU JU JU JU
Most organizations produce information only if its valueexcee
JU JU JU JU JU JU JU U
J
ds its cost. However, there are two situations where informat
JU JU J U JU JU JU JU JU JU
ion may be produced even if its cost exceeds its value.
JU JU JU JU JU JU JU JU JU JU
a. It is often difficult to estimate accurately the value of i
JU JU JU JU JU JU JU JU JU JU
nformation and the cost of producing it. Therefore, organ JU JU JU JU JU JU JU JU
izations may produce information that they expect will pr JU JU JU JU JU JU JU JU
oduce benefits in excess ofits costs, only to be disappoint JU JU JU JU U
J JU JU JU JU JU
ed after the fact. JU JU JU
b. Production of the information may be mandated by either a g JU JU JU JU JU JU JU JU JU JU
overnment agency or a private organization. Examples inc JU JU JU JU JU JU JU
lude the tax reports required by the IRS and disclosure req
JU JU JU JU JU JU JU JU JU JU
uirements forfinancial reporting. JU U
J JU
1.2 Can the characteristics of useful information listed inTable
JU JU JU JU JU JU JU U
J JU
1-
1 be met simultaneously? Or does achieving onemean sacrificin
JU JU JU JU JU JU JU U
J JU
g another?
JU
Several of the criteria in Table 1.1 can be met simultaneously.
JU JU JU JU JU JU JU JU JU JU J
UFor example, more timely information is
JU JU JU JU JU
3-3
Copyright (c) 2021 Pearson Education, Inc. JU JU JU JU JU
, Accounting Information Systems JU JU
also likely to be more relevant.
JU JU JU JU JU J U Verifiable informationis lik JU U
J JU
ely to be more accurate.
JU JU JU JU
However,achievingone objective mayrequiresacrificinganoth JU U
J JU JU U
J JU U
J
er. For example, ensuring that information is morecomplete ma
J U JU JU JU JU JU JU U
J JU
y reduce its timeliness. Similarly, increased verifiabilit
JU JU JU J U JU JU
y and accuracy may reduce its timeliness.
JU JU JU JU JU JU
The decision maker must decide which trade-
JU JU JU JU JU JU
offs arewarranted in each situation.
JU U
J JU JU JU
1.3 You and a few of your classmates decided to become entrepreneur
JU JU JU JU JU JU JU JU JU JU
s. You came up with a great idea for a newmobile phone applicat
J U JU JU JU JU JU JU JU JU JU U
J JU JU
ion that you think will make lots of money. Your business plan w
JU JU JU JU JU JU JU JU JU JU JU JU
on second place in a local competition, and you are using the $1
JU JU JU JU JU JU JU JU JU JU JU JU
0,000 prize to support yourselves as you start your company.
JU JU JU JU JU JU JU JU JU
a. Identify the key decisions you need to make to be successful e JU JU JU JU JU JU JU JU JU JU JU
ntrepreneurs, theinformation you need tomake them, and the b JU JU JU JU JU U
J JU JU JU JU
usiness processes you will need to engage in. JU JU JU JU JU JU JU
b. Your company will need to exchange information withvariou
JU JU JU JU JU JU JU U
J
s external parties. Identify the external parties, and sp
JU JU JU JU JU JU JU JU
ecify the information received from and sent to each of the JU JU JU JU JU JU JU JU JU JU
m.
The author turns this question into an in-
JU JU JU JU JU JU JU
class groupactivity. Students are divided up in groups, tol
JU U
J JU JU JU JU JU JU JU
d toclose their books, and given 15 minutes to:
JU U
J JU JU JU JU JU JU JU
a. Think through the business processes, key decisions,and i JU JU JU JU JU JU U
J JU
nformation needs issues in their group. JU JU JU JU JU
b. Identify the external users of information and specify JU JU JU JU JU JU JU JU
the information received from and sent toeach of them.
JU JU JU JU JU JU U
J JU JU
One group is selected to present their answers to the class. The
JU JU JU JU JU JU JU JU JU JU JU JU
other groups are told to challenge the group’s answers, provide
JU JU JU JU JU JU JU JU JU JU
alternative answers, and chip in with additional answers not pr JU JU JU JU JU JU JU JU JU
ovided by the selected group. Since the group that presents is no
JU JU JU JU JU JU JU JU JU JU JU
t selected until after the time has expired, students are motiva
JU JU JU JU JU JU JU JU JU JU
tedto do a good job, as they will be presenting to their peers.
U
J JU JU JU JU JU JU JU JU JU JU JU JU
The value of this activity is not in arriving at a
JU JU JU JU JU JU JU JU JU JU
3-4
Copyright (c) 2021 Pearson Education, Inc. JU JU JU JU JU
